Property Market 2020

fret_wimp2 · 19-05-2020 09:54AM

Hubertj wrote: »

does the report lay out where the over supply is? For example, if there are 10k empty units in longford does that really constitute oversupply? IF there is such an oversupply why aren't people buying the empty units?

Perhaps most people dont want to live in Longford.
People want to purchase in a convenient location, convenient for work, school etc. During the boom estates were being built in Longford and advertised as only 2 hours from Dublin!

People commuting for work wont want those hosues.
People who dont work but still need housing dont want them and in Ireland the housing system really tries to accommodate people in this regard, for better or worse.

If a breakdown could be obtained by county, its likely Longford (or Leitrim or other Rural counties) didn't have a housing shortage.

Shortage is in the area where large quantities of people want to live, i.e. Cities & towns, in particular, Dublin.

Hubertj · 19-05-2020 09:59AM

fret_wimp2 wrote: »

Perhaps most people dont want to live in Longford.
People want to purchase in a convenient location, convenient for work, school etc. During the boom estates were being built in Longford and advertised as only 2 hours from Dublin!

People commuting for work wont want those hosues.
People who dont work but still need housing dont want them and in Ireland the housing system really tries to accommodate people in this regard, for better or worse.

If a breakdown could be obtained by county, its likely Longford (or Leitrim or other Rural counties) didn't have a housing shortage.

Shortage is in the area where large quantities of people want to live, i.e. Cities & towns, in particular, Dublin.

totally agree. so it is pointless saying there is an oversupply if it is an areas where nobody wants to live.

GreeBo · 19-05-2020 10:13AM

Cuddlesworth wrote: »

And there is a decent chance the employer might not open again or might have to cut staff due to reduced demand.

Can you really say that though? Based on what?
Do you think 50% of those business are going to close? more/less?

hometruths · 19-05-2020 10:14AM

Hubertj wrote: »

does the report lay out where the over supply is? For example, if there are 10k empty units in longford does that really constitute oversupply? IF there is such an oversupply why aren't people buying the empty units?

Oversupply nationally, but less so in Dublin naturally:

Whilst there was oversupply in every single local authority for both houses and apartments (with the exception of South Dublin for houses) in 2011 (Kitchin et al., 2010), the extent of this oversupply varied geographically. Much of rural Ireland had extensive levels of vacancy. In Dublin, the overall vacancy rate for the four local authorities was 8.3% (43,707 units; 25,333 of which were apartments) (CSO 2012). While the vacancy rate of houses was low, with only small pockets of oversupply, the vacancy rate for apartments was 16-19%

I don't have the time or patience to work out the 2011 in Dublin optimum + 2011-2020 Dublin housing stock increase + net population increase, but my gut tells me that we would see something similiar - i.e a greater number of units per 1000 in 2020 than what was considered the optimum in 2011.

Interestingly for those of us (me included) who thought that ghost estates were the scourge of the midlands:

hometruths · 19-05-2020 10:31AM

Hubertj wrote: »

totally agree. so it is pointless saying there is an oversupply if it is an areas where nobody wants to live.

You do realise that oversupply relates to demand and price as well as just the physical quantity?

It might be pointless if you only care about what's happening in D4 but it's a meaningful economic concept!

JimmyVik · 19-05-2020 10:32AM

James 007 wrote: »

Yes but you need to play their game, if an EA indicates to give you 10% reduction, then your next step is to get a further reduction either by saying you will go off & think about it , maybe flog them off to say I need to consult my partner etc & come back with another slight reduction maybe 5%, or walk the house with a builder or a so called 'builder' & explain to the EA that there are certain renovation works required coming in a X amount & you need to go off & consult your partner as this changes everything etc.

I think EAs are like the TV license inspectors. They've heard them all before

fret_wimp2 · 19-05-2020 10:32AM

To my mind, a clear definition of how housing shortage is calculated is key, and i have not seen that yet.

if its country wide, there probably is not much of a shortage.
If its a city or town basis , Dublin in particular, its going to be larger in some areas, small in others.
If its down to postcode or smaller then there are going to be massive variations.
Or it could be done at a pricing level, i.e. massive shortage in the 100k-400k bracket, not so much in the 1 million+ bracket.
Or maybe a combo of location and price.

Marius34 · 19-05-2020 10:34AM

schmittel wrote: »

Housing in Ireland - from crisis to crisis is a 2015, report from the National Institute for Regional and Spatial Analysis, which is more interesting than it sounds.

Given the amount of times on the thread we are told "this time is different, there was a massive oversupply in 2009" it won't surprise anybody that the report confirms this was a problem at the time:

So, according to this, if the oversupply in 2011 was 110,000, the optimum supply would have been 1,884,845 units for our then population of 4,588,252 - a figure of 411 units per 1000 people.

Since then housing stock has risen to 2,053,500 (gov data to 31/12/2018 + estimates of new builds in 2019) and population has risen to 4,902,000.

So the current estimate is 419 units per 1000 people.

Does anybody know what is different now that 419 units per 1000 people represents a chronic undersupply, but 9 years ago 411 units per 1000 was the optimum?

It's interesting, but to much assumptions and speculation on vacant homes. Vacant home from CSO doesn't necessarily means empty and ready for moving in. The trends are very important, but the actual vacancy number are very misguided. Even building approved to be demolished it still counted as vacant. So those 110.000 can't be counted as oversupply at all.
Further you have slightly off numbers with population and housing stock. One example you can not add 2018 housing stock + new construction in 2019. There are buildings that get demolished over year, or etc. As well for example New Priory in Clongriffin, they are sold as New apartments (New Builds), but they always was part of a housing stock, the only difference that is moving from vacant to occupied for CSO data.
Other than that households are getting smaller, which is important factor for housing stocks when comparing with number of dwellings.

GreeBo · 19-05-2020 10:44AM

Hubertj wrote: »

does the report lay out where the over supply is? For example, if there are 10k empty units in longford does that really constitute oversupply? IF there is such an oversupply why aren't people buying the empty units?

Also taking total population figures over 9 years and not giving any details on how the demographics may have changed is disingenuous.

For example, divorce rates are up, marriage rates are down, median population age is up. All of this means more people who need somewhere to live despite the population staying relatively the same.

Mic 1972 · 19-05-2020 10:46AM

Cupatae wrote: »

People are always going to need a place to live tho, they ve the prices driven up so high, even now they make a mint, they dont have to sell cause theirs recession.

People need a place to live but if they have no bidding power then the price will have to come down
Also there are investors who may enter the market when things are convenient or stay away when prices are too high

hometruths · 19-05-2020 10:53AM

GreeBo wrote: »

Also taking total population figures over 9 years and not giving any details on how the demographics may have changed is disingenuous.

For example, divorce rates are up, marriage rates are down, median population age is up. All of this means more people who need somewhere to live despite the population staying relatively the same.

Average household size increased between 2011 and 2016, from 2.73 to 2.75 persons reversing a long term trend of declining household size.

https://www.cso.ie/en/releasesandpublications/ep/p-cp4hf/cp4hf/hhlds/

Which, oddly enough, means the opposite of what you posted.

Oliver Fisher · 19-05-2020 12:13PM

GreeBo wrote: »

Can you really say that though? Based on what?
Do you think 50% of those business are going to close? more/less?

2 mates of mine lost their job recently, they both worked for a tech company (not the classic café, restaurant, pub or SMB type of job). They got some pocket money from their previous employer and will be fine financially. Hopefully, they will get a new job in a couple of months.

Of course, this is an anecdote and not a fact. But in their case, they will have to wait few weeks/months to get a new job and wait another 6 moths to pass their probation period to qualify for a mortgage. What if this more than a couple of odd cases and a lot people actually don't qualify for mortgages over the next 6 to 12 months?

If this is the case, I can only picture prices dropping (a bit or a lot, who knows?). But then if you look at what is available on daft, the housing stock is pretty dreadful. So thanks to the housing crisis, best case scenario you get a property that requires to be refurbished but at a discount rate. Still better than nothing but far from ideal.

Although, I'm no expert and might be talking ****e. Who knows what will happen, no one can be sure of anything right now.

Reversal · 19-05-2020 12:59PM

Oliver Fisher wrote: »

2 mates of mine lost their job recently, they both worked for a tech company (not the classic café, restaurant, pub or SMB type of job). They got some pocket money from their previous employer and will be fine financially. Hopefully, they will get a new job in a couple of months.

Of course, this is an anecdote and not a fact. But in their case, they will have to wait few weeks/months to get a new job and wait another 6 moths to pass their probation period to qualify for a mortgage. What if this more than a couple of odd cases and a lot people actually don't qualify for mortgages over the next 6 to 12 months?

If this is the case, I can only picture prices dropping (a bit or a lot, who knows?). But then if you look at what is available on daft, the housing stock is pretty dreadful. So thanks to the housing crisis, best case scenario you get a property that requires to be refurbished but at a discount rate. Still better than nothing but far from ideal.

Although, I'm no expert and might be talking ****e. Who knows what will happen, no one can be sure of anything right now.

Yep certainly there will be a lot of people taken out of the game altogether for a while.

But the average budget of those who remain will have reduced too. Salaries may be reduced, bonuses gone, overtime restrictions, increments or raises put on hold etc. The amount that those who remain in the market can borrow is going to drop, the average amount approved is going to slump. Never mind what sentiment will mean for what people are comfortable with borrowing.

And before any of that starts to bite, the removal of exemptions will be huge. One fifth of all buyers will have their budget reduced by a quarter immediately, before you even consider the variables discussed above.

Padre_Pio · 19-05-2020 01:02PM

Oliver Fisher wrote: »

Although, I'm no expert and might be talking ****e. Who knows what will happen, no one can be sure of anything right now.

We won't know until the country starts to reopen.

It's better for a failing company to keep open and claim COVID payment, than close and face redundancies.

Mic 1972 · 19-05-2020 01:10PM

Oliver Fisher wrote: »

2 mates of mine lost their job recently, they both worked for a tech company (not the classic café, restaurant, pub or SMB type of job). They got some pocket money from their previous employer and will be fine financially. Hopefully, they will get a new job in a couple of months.

Of course, this is an anecdote and not a fact. But in their case, they will have to wait few weeks/months to get a new job and wait another 6 moths to pass their probation period to qualify for a mortgage. What if this more than a couple of odd cases and a lot people actually don't qualify for mortgages over the next 6 to 12 months?

If this is the case, I can only picture prices dropping (a bit or a lot, who knows?). But then if you look at what is available on daft, the housing stock is pretty dreadful. So thanks to the housing crisis, best case scenario you get a property that requires to be refurbished but at a discount rate. Still better than nothing but far from ideal.

Although, I'm no expert and might be talking ****e. Who knows what will happen, no one can be sure of anything right now.

I agree with all of the above, expect I'm not seeing any sing of decline in the asking prices. The Covid crisis has been on for a while now, plenty of people have lost they ability to get a mortgage at this point, Companies have laid off staff and reduced salaries but the market is still somehow going strong. I'm curious to see what happens in the next few months, I'm just surprised taht nothing has happened so far
I did reach out to a few EAs to inquire about offers on specif properties and they all seem to have decent offers

GreeBo · 19-05-2020 01:12PM

Mic 1972 wrote: »

I agree with all of the above, expect I'm not seeing any sing of decline in the asking prices. The Covid crisis has been on for a while now, plenty of people have lost they ability to get a mortgage at this point, Companies have laid off staff and reduced salaries but the market is still somehow going strong. I'm curious to see what happens in the next few months, I'm just surprised taht nothing has happened so far
I did reach out to a few EAs to inquire about offers on specif properties and they all seem to have decent offers

When it comes right down to it, you only need 2 interested parties to create demand and keep prices up.
Going from 5 bidders to 2 bidders is basically what happens in the end of every house purchase anyway, so until we get down to the 1 or fewer bidders, house prices wont move much.

hometruths · 19-05-2020 01:20PM

Oversupply coming to a suburb near you, no need to listen to me, listen to Ronan Lyons instead:

The vast majority of new homes built in Ireland over the last couple of years - when supply has improved - have been either estate houses or one-offs. The problem is: the country doesn't need any more of these types of homes. Under no reasonable projection of demographics will the country ever have more than 1.5 million families. And yet, Ireland already more than this in its housing stock and is building lots more.

This mismatch between the type of supply and the type of demand should dominate housing policy over the next five years, much as the mismatch between the scale of supply and demand should have dominated it over the last five. To get a sense of what lies in store, it is worth checking the snapshot in this latest Daft.ie Sales Report.

Q2 June 2019 Daft Sales Report

Mic 1972 · 19-05-2020 01:33PM

schmittel wrote: »

Oversupply coming to a suburb near you, no need to listen to me, listen to Ronan Lyons instead:

Q2 June 2019 Daft Sales Report

That's a report from one year ago

awec · 19-05-2020 01:34PM

schmittel wrote: »

Oversupply coming to a suburb near you, no need to listen to me, listen to Ronan Lyons instead:

Q2 June 2019 Daft Sales Report

His point was that while the supply of suburban houses is to be welcomed, we needed to build more apartments, he particularly mentions for students and downsizers.

The 1.5 million quote is particularly odd. Is he suggesting that as there may only ever be 1.5 million families in Ireland at any one time that there would be no need for more houses than this?

Developers will stop building suburban 3 beds when people stop buying them. The reality is that most have been sold before a brick is laid as demand is high.

cnocbui · 19-05-2020 01:40PM

schmittel wrote: »

Oversupply coming to a suburb near you, no need to listen to me, listen to Ronan Lyons instead:

Q2 June 2019 Daft Sales Report

He's changed his tune:

In a report issued in early January by Daft, another Irish real estate agency, Ronan Lyons, an economist at Trinity College Dublin, estimated that Ireland needed between 40,000 and 50,000 new homes each year because of population growth and housing obsolescence. Instead, “for every ten new families formed,” he wrote, “just two new dwellings were built, for the entire period from 2011 to 2016.”

https://www.nytimes.com/2017/02/01/realestate/real-estate-in-dublin-ireland.html

hometruths · 19-05-2020 01:42PM

awec wrote: »

His point was that while the supply of suburban houses is to be welcomed, we needed to build more apartments, he particularly mentions for students and downsizers.

The 1.5 million quote is particularly odd. Is he suggesting that as there may only ever be 1.5 million families in Ireland at any one time that there would be no need for more houses than this?

Developers will stop building suburban 3 beds when people stop buying them. The reality is that most have been sold before a brick is laid as demand is high.

That is some excellent out of context selective deleting you have going on there - is that a mod privilege?!

awec · 19-05-2020 01:42PM

schmittel wrote: »

Housing in Ireland - from crisis to crisis is a 2015, report from the National Institute for Regional and Spatial Analysis, which is more interesting than it sounds.

Given the amount of times on the thread we are told "this time is different, there was a massive oversupply in 2009" it won't surprise anybody that the report confirms this was a problem at the time:

So, according to this, if the oversupply in 2011 was 110,000, the optimum supply would have been 1,884,845 units for our then population of 4,588,252 - a figure of 411 units per 1000 people.

Since then housing stock has risen to 2,053,500 (gov data to 31/12/2018 + estimates of new builds in 2019) and population has risen to 4,902,000.

So the current estimate is 419 units per 1000 people.

Does anybody know what is different now that 419 units per 1000 people represents a chronic undersupply, but 9 years ago 411 units per 1000 was the optimum?

The census data referenced here, is this the same methodology used as the more recent census information that was proven to be wildly inaccurate? i.e. houses that didn't return a census were deemed vacant?

Not dismissing it, just genuinely curious.

hometruths · 19-05-2020 01:43PM

Mic 1972 wrote: »

That's a report from one year ago

Good point. Buy now.

cnocbui · 19-05-2020 01:47PM

awec wrote: »

His point was that while the supply of suburban houses is to be welcomed, we needed to build more apartments, he particularly mentions for students and downsizers.

The 1.5 million quote is particularly odd. Is he suggesting that as there may only ever be 1.5 million families in Ireland at any one time that there would be no need for more houses than this?

Developers will stop building suburban 3 beds when people stop buying them. The reality is that most have been sold before a brick is laid as demand is high.

REITs bought something like 95% of all apartments built in Dublin last year, so do we need more apartments or perhaps the government to stop this sort of monopolisation of residential stock by corporations?

hometruths · 19-05-2020 01:48PM

awec wrote: »

The census data referenced here, is this the same methodology used as the more recent census information that was proven to be wildly inaccurate? i.e. houses that didn't return a census were deemed vacant?

No idea, you're not the first boardsie to query the vacancy figures, and I must admit I did not fact check it with the academics at the National Institute for Regional and Spatial Analysis.

awec · 19-05-2020 01:55PM

schmittel wrote: »

No idea, you're not the first boardsie to query the vacancy figures, and I must admit I did not fact check it with the academics at the National Institute for Regional and Spatial Analysis.

Pfffft, how are we supposed to believe you if you don’t verify your sources?!

Assetbacked · 19-05-2020 01:55PM

cnocbui wrote: »

REITs bought something like 95% of all apartments built in Dublin last year, so do we need more apartments or perhaps the government to stop this sort of monopolisation of residential stock by corporations?

We are still a home ownership country so it isn't right that institutionals (buying in bulk) and local authorities (paying rents to landlords) elbow out individuals who want to buy their own apartments. Otherwise, I would like to see rents collapse so it should be possible to rent an apartment for a grand. Right now of course it isn't even possible to rent somewhere cheaper if you wanted and compromise on location or standard. It's a market too appealing to investors at the expense of the individuals and has been the last few years, which hopefully, due to the covid19 valve releasing pressure in the economy, will start to correct. What I don't like is that there are too many rules restricting the market while at the same time there is still a misperception that the market is setting the price of rents to be so high.

hometruths · 19-05-2020 02:02PM

awec wrote: »

Pfffft, how are we supposed to believe you if you don’t verify your sources?!

Don't worry, I am close to giving up trying. Have been posting based on opinions I have formed watching the market, and they are rubbished, why do no experts say this etc.

So I post some expert views - the guys tasked with studying long term spatial planning and the economist probably most associated with housing market commentary.

And what do you know? The spatial guys are using flawed data and the economists views are out of date!

Though it does beg the question of why, if posters believe CSO data is wildly inaccurate, why are also so keen to believe people using CSO data to show a housing shortage?

hometruths · 19-05-2020 02:06PM

awec wrote: »

His point was that while the supply of suburban houses is to be welcomed, we needed to build more apartments, he particularly mentions for students and downsizers.

The 1.5 million quote is particularly odd. Is he suggesting that as there may only ever be 1.5 million families in Ireland at any one time that there would be no need for more houses than this?

Developers will stop building suburban 3 beds when people stop buying them. The reality is that most have been sold before a brick is laid as demand is high.

This is not a difficult one to grasp. He is talking about suburban 3 beds, most ideally suited to and in demand by cohabiting families of 2 adults and 2 children. There will never be 1.5 million cohabiting 2+2 families in Ireland at any one time because that would total 6 million people.

If that were the case even GreeBo's idea of what a Dublin house should cost would be conservative, irrespective of the public transport links!

awec · 19-05-2020 02:06PM

schmittel wrote: »

Don't worry, I am close to giving up trying. Have been posting based on opinions I have formed watching the market, and they are rubbished, why do no experts say this etc.

So I post some expert views - the guys tasked with studying long term spatial planning and the economist probably most associated with housing market commentary.

And what do you know? The spatial guys are using flawed data and the economists views are out of date!

Though it does beg the question of why, if posters believe CSO data is wildly inaccurate, why are also so keen to believe people using CSO data to show a housing shortage?

It actually is inaccurate if it's the same metholodogy. I'm not trying to rubbish you and hope you don't give up, as you post some good stuff on here.

But as posted before, the recent census showed thousands of vacant properties in a particular Dublin council. The council took it upon itself to verify the figures and found that the overwhelming majority of properties that the census/CSO data deemed vacant were in fact occupied. It was something like 80-90% of them. Basically it turns out that the census is a terrible way to gauge occupancy of property since there are many people who appear to just not bother filling out the census.

If the 2011 one was the same then the data is unreliable.

Property Market 2020

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